Blockchain Governance and Project Catalyst

October 12, 2021 by Varderes Barsegyan ‐ 7 min read

Thomas Edison: The body is a community made up of its innumerable cells or inhabitants.

Blockchain Governance and Project Catalyst

When it comes to blockchain technologies, Cardano sets itself apart in a completely unique and revolutionary way: on-chain governance. On-chain governance provides a mechanism for building, improving and maintaining a blockchain-based system in a truly decentralized and fully democratized way. In fact, solving this problem is Cardano’s ultimate goal. It is the final “era” they have laid out in their roadmap: Voltaire. Only after entry into this era can Cardano realize its vision of providing the world with a self-governing global financial operating system.

Solving governance means solving an incredibly complex set of problems that require both high-level, abstract ideas and feasible, real-life engineering. Research in this field is a beautiful amalgamation of political science, economics, computer science, and game theory. Infact, humanity has been experimenting with solutions to these problems since the dawn of civilization.



Our ancestors have invented Democracy, Monarchy, Communism, Oligarchy, Theocracy, Dictatorship, and everything in between. Though these forms of government have been effective (at least temporarily) in their particular contexts, Charles Hoskinson, the Cardano team, and members of the community have taken it upon themselves to establish a newer form of government, one that is fair, incorruptible, and future-proof.

Cardano has started this journey with Project Catalyst, a decentralized fund that enables community members to propose ideas and be rewarded with funding, should those ideas be supported and voted in by other members of the community. Funds come from Cardano’s on-chain treasury, which grows as users interact with the blockchain. A meticulous incentive structure is put in place to minimize bias, reward community feedback, and motivate voters to participate in every fund cycle. You can think of Project Catalyst as Cardano’s first real proof-of-concept for blockchain governance. It is the world’s largest crowdsourced fund, with over $1 billion in management.



Funding campaigns

Ongoing campaigns can be seen on Cardano’s Ideascale page. Given their importance to global adoption, the following campaigns have persisted in future funding rounds after their debut:

  • Developer Ecosystem: help developers build applications on Cardano’s blockchain
  • DApps & Integrations: create decentralized applications and integrate external systems into Cardano
  • Distributed Decision Making: ensure everyone has a voice in the Cardano ecosystem
  • Proposer Outreach: make Cardano more accessible to entrepreneurs outside of Cardano
  • Catalyst Value Onboarding: strengthen and evolve the Project Catalyst incentive structure
  • Metadata Challenge: use data attached to transactions to solve a plethora of problems
  • Grow Africa, Grow Cardano: expand Cardano to nations in Africa
  • Scale-up Cardano’s DeFi Ecosystem: build decentralized financial systems on Cardano

There are many more campaigns not mentioned here, and the list is continuously evolving. In fact, community members can propose new funding campaigns for future cycles. For example, F6: Fund7 Challenge Setting is a campaign for proposing new categories in the next cycle. This enables the community to not only generate ideas within existing paradigms, but also expand the overall scope of problems that the community can address!

Fund cycles

A funding cycle takes about 12 weeks. Beyond this, winners of proposals are given an additional three months to implement their proposals. There are three primary phases during a cycle: Innovation, Governance, and Execution. These, in turn, are broken down into multiple sub-phases.

During Innovation, proposers discuss ideas and community advisors share their feedback with proposers:

  • Challenge refinement: brainstorming, sharing ideas, expressing options
  • Ideation: submitting rough draft of proposals and receiving initial feedback
  • Refinement: incorporating feedback based on Impact, Auditability and Feasibility
  • Finalization: completing proposals
  • Assessment: final review from Community Advisors
  • Voter discussion: determine which proposals will be funded and discuss details with proposers

During Governance, community members vote and the winners are determined:

  • Registration: voters register their Yoroi or Daedalus wallets with the Project Catalyst mobile app; registered wallets must contain at least 500 ADA to be eligible for voting
  • Voting: voters vote on proposals; the weight of each person’s vote depends on how much ADA they hold in their wallet
  • Tallying: a voting committee tallies votes and publishes the results to the community

Finally, during Execution, rewards are distributed to the winners, which in turn start to implement their proposals:

  • Rewarding: rewards are distributed to approved proposers, voters and Community Advisors
  • Reporting: approved voters send progress reports for the next 3 months

The status of the current cycle can be seen in this highly informative gantt chart! Here is the breakdown of Fund 6:

F6 gantt


Incentivizing participation

Project Catalyst grows significantly at every funding cycle. This is no accident. The organizers of Catalyst, led by Dor Garbash, have established highly effective incentives that enable members of the community to actively participate. If you’re a proposer, you can potentially receive funding to work on a project you are passionate about and that the Cardano community finds valuable. As a voter, you receive ADA for simply voting on your favorite proposals. Finally, as a Community Advisor (or Veteran Community Advisor if you have been advising since a previous cycle), you are rewarded ADA for providing constructive feedback to proposals and assessing them based on Impact, Auditability and Feasibility.

The size of these rewards depends on the current funding cycle. For example, a total of $4 million worth of ADA was distributed to proposers, voters and community advisors for Fund 6!

How to get involved

  • Writing proposals: Proposals can be written in during the Execution phase described above. Community advisement: In addition to writing proposals, you can provide comments to initial proposals and assess them after they have been finalized. Again, this is done during the Execution phase.
  • Voting: Voting simply requires registration of your Yoroi or Daedalus wallet. Here are thorough instructions!
  • Town Halls: The Cardano Foundation puts together weekly town halls to share the latest developments within Project Catalyst, provide an opportunity for successful proposers to share what they’ve built, and answer any questions the community might have.
  • Catalyst Circle: People outside of the Cardano Foundation have the opportunity to actually shape the future of Project Catalyst and its processes. They can be nominated into specific roles by other members of the community. This can be an entire article on its own so please read more about it here.
  • Catalyst Swarm: Swarm is dedicated to organizing meetings, sessions and events to connect people and projects within the Catalyst ecosystem. They have dedicated meetings for deep diving into specific funding categories and proposals that have started to gain a notable amount of traction.
  • Discord
  • Telegram


The endgame of Catalyst

Project Catalyst has been an incredible success for Cardano, in particular, and for blockchain in general. There are now over 50,000 wallets registered to vote and the number of proposals are growing exponentially at every fund cycle. Not only is it a proven system that helps kick start projects within the ecosystem, the system itself is set up to evolve and adapt to the world and the needs of humanity. Eventually, Catalyst will evolve into a fully self-sustaining, digitized government that other countries and organizations around the world can use as their underlying governance infrastructure. The trajectory of this project points to a future where the Voltaire era is realized and Cardano’s ultimate mission is achieved!

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